Lambs

They paid $1.7 million for it seven months ago. Now listed for $1.899 million. Both are big numbers for a property that, wall-to-wall, is twelve feet wide. At the Sunday open house there were three couples and a realtor present at the same time. It was jammed. Prospective buyers had to turn sideways and squish their noses on the exquisite wallcoverings to let another pass.

  The economics of mid-town Toronto real estate underscore a market that’s lost its way. To afford this micro slice of designer bliss a buyer would need 20% down – about $400,000 – pay another $68,200 in non-refundable land transfer tax, then assume a $1.52 million mortgage with monthly payments of $7,000 a month (or almost $8,000 with property taxes and insurance included). That would require an income of close to $300,000. The bank interest alone totals $3,300 a month.

Yes, another GreaterFool field trip into the wilds of Canada’s biggest real estate market and, now that Vancouver is cooling faster than Donald Trump’s credibility (“I attracted more people than Obama. And probably Jesus. Honest…”), the frothiest in North America. As explained last week, the fact there’s just a 20-day supply of houses for sale in a region bursting with six million people explains a lot. It guarantees prices this spring will rise even as sales start to crumble – exactly the scenario Vancouver faced last summer before the lights went out.

Meanwhile the list of negatives continues to extend. Yes, we have a slow economy, historic debt, stagnant incomes, spendy politicians, rising taxes and now a goofy US president to contend with. That will bring higher interest rates and trade problems. The Bank of Canada is worried (we heard that last week). The T2 gang is freaked out (hence the Trump-ready cabinet shuffle in Ottawa). But Toronto buyers bravely keep buying – as with the 23% premium paid for the dodgy digs I featured seven days ago.

Now, to be fair, houses listed and selling for $1.5 million and more are not the norm. The average detached 416 property commands $1.286 million and in 905, where the drywallers live, it’s just $934,000. The average price across the GTA (condos included) is $730,000, which is 17% higher than a year earlier.

As always, then, first-time buyers are essential to keep the real estate fires burning. Without those sacrificial lambs there would be no move-up buyers on the property ladder, leading to the ultimate accomplishment of paying almost $2 million for a house narrower than your car. But the obstacles being thrown in the path of the newbies are piling up – stuff like the stress test which about 40% of the kids say will keep them sidelined.

Things just got a little worse, too. For the third time in three years, mortgage insurance premiums are going up. A lot. In some cases, doubling. Ouch.

Source: Canadian Mortgage Trends

Mortgage insurance is required (by law) for anyone buying a property with less than 20% down. For listings over $1 million, it’s not available, but for places selling under that amount buyers can get into ownership with as little as 5% down – only if they buy the insurance. You can see how much of an impact this could have on the entire market. Moisters buying after mid-March with just 5% down will have to finance a significant premium equal to 4% of the amount mortgaged – typically added to the principal, amortized over 25 years, and thereby suitably bloated.

But what’s interesting about the premium hike, initiated by CHMC and followed by Genworth, is that people with big down payments – up to 20% – are seeing their premiums almost doubled. Mortgage brokers warn this will inflate interest rates charged by major lenders who routinely sell the conventional mortgages (20% down) by securitizing them, and paying the premium themselves to do so.

Add to this the additional overhead Ottawa is forcing on lenders later this year when it starts reducing CMHC loan exposure and making the banks foot part of the cost. And all of it will happen as the Fed is expected to hike rates, once in March and again in June (unless the Trumpster blows up), pushing bond yields higher and taking fixed-rate mortgages along for the ride.

In short, there’s no economic or financial reason why house prices should rise. There are many why they should fall. But I give up. What’s logic got to do with it?

Source: Marisha Robinsky, Bosley Real Estate

160 comments ↓

#1 Harvey Lipshitz on 01.22.17 at 4:52 pm

I guess that I could move but it’s kinda nice not having a mortgage.

#2 mark on 01.22.17 at 4:55 pm

Shiller won’t be surprised if market crashes and says Trump is a horrible nightmare, adjust your portfolio accordingly.

http://business.financialpost.com/investing/outlook-2017/donald-trump-could-send-america-into-the-next-great-crash-warns-nobel-laureate-robert-shiller

#3 dosouth on 01.22.17 at 5:09 pm

yeah you’re right…this isn’t going to end (or continue) well.

#4 There is no risk on 01.22.17 at 5:13 pm

banks create the loan money out of thin air
so the ethereal (loan) is collateralized on the real (estate)
therefore, CMHC is,
hoax maintenance
the hoax is that there was any risk to the lender
there is none
a lie believed by everyone is not the truth

#5 InvestorsFriend on 01.22.17 at 5:17 pm

Mortgage Insurance Table Observations

The first three lines in the table where the loan is 80% of value or less do not require CMHC insurance (and Garth did mention that above). The lender can choose to take out this insurance it is at the lenders cost if they do.

For loan to value ratio above 80%, the borrower MUST pay the premium (which gets added to the mortgage). It’s interesting to note that there is now less incentive to move your down payment up from 10% to 15%.

Also as before, never ever let the down payment be 9%, 14% or 19%.

#6 lin on 01.22.17 at 5:17 pm

Toronto downtown: all within this week:
-60 yrs old lady i know had to move all her stuff to storage, going back to family as her landlord wants place back for family. Evicted with new rental place
-600 sq ft gloomy places going for 1500$/mo, landlord wants proof of income 70k/yr
-Many got evicted to increase rent
-90% landlords are chinese
-Please do the foreign restriction on housing fast bec it’s so unsettling how so many renters are so insecure.
Something needs to be done to secure shelter. Trudeau campaigned “affordable housing”: huge failure !

#7 InvestorsFriend on 01.22.17 at 5:20 pm

Sigh… about that thin air thing

#4 There is no risk on 01.22.17 at 5:13 pm claimed:

banks create the loan money out of thin air

*******************************************
Well sort of the bank TOGETHER with a borrower can create the loan out of thin air by offsetting it with a deposit OWED by the bank to the borrower.

As soon as the borrower transfers the money to the home seller, the seller now owns that deposit. If the borrower defaults (without insurance) the bank still owes the house seller his deposit.

Got it?

#8 Hawk on 01.22.17 at 5:22 pm

Donald’s Trump’s credibility is indeed low, but still a lot higher than the MSM covering him whose approval is hovering at 14% and who had to acknowledge their already proven falsehood that he removed Martin Luther King’s bust from the White House.

Critics of Trump still fail to grasp the significance of Churchill’s famous statement as it applies to Donald…….”democracy is the worst form of government, except for all others”.

#9 Bdwy sktn on 01.22.17 at 5:27 pm

Falcons unstoppable. New England look out. Van re still frozen up.

#10 InvestorsFriend on 01.22.17 at 5:29 pm

Borrowing for a a House over $1 million?

Okay so no CMHC insurance available to the bank on loans for houses over one million, no matter the downpayment.

I suspect banks will want AT LEAST 20% down payment.

The bank MIGHT lend a new doctor on 10% down for a $1.1 million house. But without the doctor being allowed to protect the bank with CMHC insurance, I suspect a higher interest rate applies as opposed to the 999k house?

If you are looking at a million plus home you should in almost all cases not be a first time buyer and you should be coming in with a down payment of 30% or (much) more. There may be exceptions such as a doctor / dentist couple with large and very secure incomes.

#11 InvestorsFriend on 01.22.17 at 5:39 pm

What Risk to CMHC?

#4 There is no risk on 01.22.17 at 5:13 pm
banks create the loan money out of thin air
so the ethereal (loan) is collateralized on the real (estate)
therefore, CMHC is,
hoax maintenance
the hoax is that there was any risk to the lender
there is none
a lie believed by everyone is not the truth

**************************************
True there is little risk to CMHC when the down payment is say 15%. But there is SOME risk that the value of the house could be less than the loan especially after costs to sell and after waiting say a year or two with no mortgage payments to get through the foreclosure process. And what if the deadbeat trashes the place?

And what about at 5% down, you don’t see risk to CMHC? Then by all means start your own lending business. (You are talking a loan that is 100% of the purchase price less selling costs). Lender without CMHC better hope that house prices never go down in taht case.

Is a private lender required (or indeed able) to arrange for CMHC insurance? I doubt it. Your new lending operation can undercut banks by not charging the CMHC insurance. Let us know how you make out.

#12 karlhungus on 01.22.17 at 5:40 pm

what does that chart tell you? prices rarely fall YOY

#13 Fleabitten Monkey on 01.22.17 at 5:40 pm

Just for VREU – story from the ground in Vic. Townhouse off MacKenzie Ave. for sale – asking $510,000. A very nice townhouse based on whats available in the market in that area. Realtor acting for his client puts in an immediate offer of $550,000. He felt the ask was low and that $550K was market value. 11 other bids on the townhouse – ultimate sale price $660,000. Realtor can’t believe his offer was $110,000 low. Lopsided market based on his assessment. Lunacy as he put it. A game. Citing ultra low inventory as the problem.

#14 Timmy on 01.22.17 at 5:42 pm

I don’t know what you mean about the lights going out in Vancouver, it is still way out of line for anyone making a Canadian salary.

#15 When Will They Raise Rates? on 01.22.17 at 5:43 pm

In short, there’s no economic or financial reason why house prices should rise. There are many why they should fall. But I give up. What’s logic got to do with it?

Logic has nothing to do with it. Those fueling the rise are lambs, indeed. Lambs don’t use logic; They follow the flock. Mix in FOMO, greed, naivete and sheer stupidity, and you have a recipe for an epic slaughter, because, well… Sheep get slaughtered.

The wolves are circling, licking their chops…

The aftermath will be glorious for those who have followed Garth’s advice and stayed liquid.

So glad I have zero debt. Yes, I intend to vultch. I just hope the government doesn’t do anything rash…

#16 Linda on 01.22.17 at 6:03 pm

12 feet wide? I trust it is quite long & has multiple floors, otherwise why would anyone want to buy such a skinny property? Yes, it does look like it has a nice exterior but golly, there are bedroom closets that are wider than this place. For sure, not a place for anyone who has claustrophobia issues. Also, the price per foot is truly astronomical. Exquisite wall coverings? I would hope so, given the insane price being asked.

#17 When Will They Raise Rates? on 01.22.17 at 6:05 pm

#14 Timmy on 01.22.17 at 5:42 pm

I don’t know what you mean about the lights going out in Vancouver, it is still way out of line for anyone making a Canadian salary.
——————–

He means that the bubble has burst. ie, the crash is now underway in YVR… It’s already down 20% from the peak, but there is still a long way down from here – some are predicting a 50-80% decline from the spring 2016 peak.

#18 Tony on 01.22.17 at 6:07 pm

There will be plenty of business for bankruptcy lawyers in the GTA. The taxpayers will be footing the bill for these imbeciles buying houses in the GTA at prices 25 to 30 years in the future.

#19 Butcher on 01.22.17 at 6:09 pm

Atlanta Falcons are the first team to qualify for this year’s Super Bowl

#20 Rural Rick on 01.22.17 at 6:09 pm

I have a hard time wrapping my head around CMHC insuring million dollar home sales. Back in the day you know when it was up hill both ways to school. CMHC was avoided like the plague. If you couldn’t make the down payment for the property with out CMHC insurance you found a cheaper property or regrouped and saved up a bigger down payment. My very trusted real estate agent (best of the best) in Toronto 30 years ago would not even show me properties that would require CMHC insurance to buy them.

#21 For those about to flop... on 01.22.17 at 6:11 pm

This house is 12 feet wide.

I’m 6 ft 2.

Kevin Lie is 5 ft 8

That leaves a 2 inch cushion in-between me and his lies if we go head to head.

Plenty of room…

M42BC

#22 TurnerNation on 01.22.17 at 6:14 pm

Just roll that CMHC premium into the Amort. 2% interest rates, not going uppa soon.

Re. Vancouver Salt Riots, I learned in some places they are adding flouride into table salt! (Killing us softly.)

So, I examined all sides of my Windsor Salt/Sel box.
It has four ingredients. Wanna know what its third one is? It’s SUGAR. That’s right, they add sugar to salt.

If anyone doubts our food supply just is another weapons delivery system to our Military Industrial complex…
Sugar is highly addictive. Of course they’ll sell us also on costly diabetes treatments.

#23 jay on 01.22.17 at 6:15 pm

Trudeau is increasing immigration to 350,000 this year, this should help bring real estate price lower . We should increase to 1 million year and lower price more. http://www.abc.net.au/news/2015-02-17/berg-you-cant-blame-foreigners-for-high-house-prices/6125500

Immigration this year will be between 280,000 and 320,000, with most being economic immigrants. — Garth

#24 nubbers on 01.22.17 at 6:19 pm

I hope we can start tracking individual examples of properties that have plummeted in value in Vancouver and then later on in Toronto.

I would like to see how soon someone beats my 60% drop (including inflation) from the previous crash.

#25 Digby Ditherman on 01.22.17 at 6:20 pm

For real estate froth its all over but the shouting.

By the time you smell the smoke in a crowded theatre, your financial pants are already on fire.

Most newbie buyers are already under water, they just don’t know it yet.

It starting to smell like the a redo of the Jimmie Carter ERA (but Version 2.0), its just that we are at the top looking down , rather than at the bottom looking up.

It is a given that we are now at global debt saturation, and at the same time are in the western producer countries at peak population. So the pool of greater fools is now (and for a very long time) less-and-less every year.

INTEREST RATES ARE ABOUT TO ROCKET!

#26 GottaLoveIdiots on 01.22.17 at 6:23 pm

Kids off to the slaughter when the rates rise. The banks always win.

#27 common sense on 01.22.17 at 6:25 pm

Supply and Demand.

It’s only money isn’t it?

#28 Nonplused on 01.22.17 at 6:35 pm

Garth, as crazy as everything is without it, you still haven’t discussed the new pole tax, er I mean “tax on everything”, er I mean “carbon tax”.

In addition to these spectacular mortgage charges the middle and lower class now has to pay a substantial new tax on everything they need. In addition this tax is going to mean most of their jobs can’t be done in Canada anymore and will move to India or China, where there are no pole taxes, er, I meant Carbon taxes. Even Turner Investments is going to have to pay more just to keep Ryan’s computer running, so his job has to go to India too or you have to raise your fees. The carbon tax even taxes investment advice.

The carbon tax really is just a pole tax. If it were really meant to influence behavior and only influence behavior, it would have been introduced in a larger package of tax reforms that would have been roughly revenue neutral. It’s not. It’s an effort by the government to move us one step closer to “to each according to his need, from each according to his ability”.

And they somehow sold this on a gullible public that decreasing the amount of food available to plants via abandoning modern life was for our own good. It’s completely incredible.

A brief science note because someone is going to say “the science is proven, we are doomed if we don’t live like primitives”. During the Cambrian explosion (when multi-celled life arose), CO2 levels in the atmosphere were at least 5 times higher than where they are now, half way through the fossil fuel age. Not only did the planet do just fine but it’s likely that the explosion of life could not have occurred without those higher CO2 levels. Take all the CO2 out of the atmosphere, and the earth would be a dead rock within a year because plants would all die. Yes, all of them. No CO2, no plants. Fungi maybe, but only until they ate the rest of the dead plants. Then they would die too. And of course, no plants = no animals.

It’s a terrible way to set tax policy. Beyond terrible. It’s evil.

#29 Dan.t on 01.22.17 at 6:40 pm

Canadians have been brainwashed since 2004 with real estate sponsored news and now fully believe that if you bought a house or buy a house, your financial security is guaranteed-

You deserve at least a massive payout- otherwise you are a loser and did something wrong. It’s reported often and tossed in everyone’s face on ctv, province, global etc.

You can and will never loose. So far so good- you are fighting against something so ingrained in Canada culture that regardless of facts, data, economic reality, the herd won’t listen…until [email protected]$t hits the fan and global, ctv, and whatever other news source starts showing broke families, a screwed young generation, people displace or willingly leaving communities because it’s so unaffordable.

Stupid and insanity are what u see looking in from outside- “that’s just the way it is” is how majority of Canada sees it.

It must be so- otherwise things would change. Don’t forget- our leaders also have a home (equity) and a condo or two – can’t let anything happen to the value of either !

You are fighting a massive uphill battle where many find it stupid yet are directly profiting- Canada really has lost its way.

#30 Said Every Bear on 01.22.17 at 6:42 pm

“So glad I have zero debt. Yes, I intend to vultch. I just hope the government doesn’t do anything rash…”

So said every prospective vulture wannabe since 2009.

You do realize it will be many many years before prices come down to a point where vultching will make sense right? I hope you do not have a family or need to move in this insane rental and housing market.

You hope the government does not do something rash? Really? The lesson for the past several years is that government policy has jerked the market all over the place. Have you been following the mixed messaging in BC – lets tax foreign buyers (good) and then try to re-inflate the market with a new homebuyers loan program (bad).

Expect the same in Ontario in 2019 once prices soften then (yes, it looks like Smoking Man again is the only one to call the timelines for, and ascent of, the TO market).

Good luck vultching – see you in 2025.

#31 When Will They Raise Rates? on 01.22.17 at 6:47 pm

#12 karlhungus on 01.22.17 at 5:40 pm

what does that chart tell you? prices rarely fall YOY
———————

Which creates, as Greenspan would say, “irrational exuberance”…That’s what makes it so devastating when prices do fall. *See the 1990 crash.* Many were over-leveraged and got wiped out. Adjusted for inflation, it took 21 years for Toronto prices to reach the 1989 peak!

This time it will be worse, much worse. The bubble is way bigger and the debt much larger – Canadian household debt is now greater than GDP… It was only 50% in 1990.

Now Canadians are at maximum leverage and require house prices to appreciate indefinitely in order to continue financing their lives. They are totally dependent on new available credit, the bulk of which relies on increasing home equity.

When prices decline this time around, the already maxxed out Canadian populace is so screwed.

#32 TurnerNation on 01.22.17 at 6:51 pm

Hey I wonder if our resident potty mouth Millennial Millionaires have bought da house yet?
It must be burning.

#33 WUL on 01.22.17 at 6:54 pm

Yesterday’s civil tone here for Ryan is off the table tonight. Also, SM is back after yesterday’s nuptials.

#34 Nonplused on 01.22.17 at 6:56 pm

“Immigration this year will be between 280,000 and 320,000, with most being economic immigrants. — Garth”

I still advocate that immigration rates should be set in formula to the unemployment rate. I am not against immigration, I am only opposed to having more immigration when we already have lots of unemployed Canadians who were here first (yes that does matter).

So if the so called “natural unemployment” rate according to our ivy league idiots is 4%, then you have some sort of formula where as unemployment heads below 4% then you allow more immigration, but as it heads above 4% significantly well you scale it back.

If we don’t do this eventually Canadian wages will be about the same as they are in foreign countries. Try paying your mortgage with that.

We do need immigration, but it should be based on what’s best for Canada and Canadians, not based on some sort of heart felt assumption we can save the world.

#35 Bat Flipper on 01.22.17 at 6:57 pm

Mortgage Fraud on the Rise.
http://www.remonline.com/mortgage-fraud-rise-says-equifax/

How else could they qualify for these mortgages?

#36 When Will They Raise Rates? on 01.22.17 at 6:57 pm

When the GTA RE music stops, it will be interesting to see what happens to the maxxed out lemmings in the 905 who used their homes as ATMs.

#37 FF 45 on 01.22.17 at 6:59 pm

Discussion of the Canadian real estate bubble which consists of Vancouver and Toronto:

https://financialfreedom45.com/2017/01/21/irrational-exuberance-in-canadian-real-estate/

#38 Joseph R. on 01.22.17 at 7:05 pm

#22 TurnerNation on 01.22.17 at 6:14 pm

If anyone doubts our food supply just is another weapons delivery system to our Military Industrial complex…
Sugar is highly addictive. Of course they’ll sell us also on costly diabetes treatments.

——————————————————-

Iodized table salt contains a small amount of potassium iodide as a dietary supplement to prevent goiter and mental retardation.

“If no glucose was present, the potassium
iodide would eventually break down into its component parts – namely potassium and
iodide ions. The iodide ions could then combine to form iodine that could actually
vaporize and leave the salt.”

Source: http://iufost.org/iufostftp/Sugar%20in%20the%20Salt+pic.pdf

#39 Freedom First on 01.22.17 at 7:05 pm

Yes. I like the mortgage insurance rates going up. Not enough, but it’s a good start.

As I said recently, I just became diversified, liquid, and unbalanced. I am overweight cash the same way I was 1 year prior to the GFC. Canada is in trouble. The US is expensive, and uncertain.

I have no fear and no greed. I have been doing this for 40 years. And in this time I did live in 2 houses I owned for a # of years. They were great in every way and cheap like borscht. Had to sell them though when they became much too expensive. A house is just a house, but profits are to be taken. I am extremely flexible.

However, I will admit, if you do not hold it against me, I do have empathy. In spite of so many people operating out of Ignorance, FOMO and Greed, it pains me to see so many people lose their jobs, become bankrupt and divorced, and have to begin from step one all over again.
This happens far too frequently, everywhere in the world.

Now. Quite a while since my Alberta update. In talking with my people in Alberta, where I live, that is, people sitting in the catbird seat, we can see clearly the mood has now deteriorated to anger.

The one positive note, Albertan’s can see people in Van and TO are no different than they are. It can’t happen here because_________________.

#40 Entrepreneur on 01.22.17 at 7:07 pm

And the real estate fake numbers and agents to push a sell no matter what and all common sense is out-the-window as the youth psychology want that house for that carry-on instinct gratification within them. As for the dude from China is long gone last year as Ross Kay mentioned on his radio talk show; It is all group emotions and believers in the real estate now and that is now down. I think some noses are getting too long as the stories are getting repetitive.

#78 Matt Poli Sci…Jean Chretien is a lawyer, knew what he was saying and when. As for the GST: Most of us were in our 20’s and 30’s, full of spirit and energy, and we listened to the news faithfully about it, worried; The news did not mentioned FTA or said about the goods imported into Canada. I am pretty sure the news media said that the reason was the economy was down and needed the taxes or similar. No mention of FTA as we listened carefully and tried to figured it out.

I heard Trump mention that other nations should listen to the people, something like that. People of a nation are the one who should benefit as they are the one who pay the taxes for the system within. Simple, and believe it not, it is better for the earth, another topic.

#41 april on 01.22.17 at 7:08 pm

#14- Garth means prices have dropped since the spring/summer and will continue to drop but yes values are still way out of line.

#42 When Will They Raise Rates? on 01.22.17 at 7:13 pm

“Adjusted for inflation, it took 21 years for Toronto prices to reach the 1989 peak!”

Should read: “Adjusted for inflation, it took 21 years for Toronto prices to get back to the 1989 peak price, ie 2010″

#43 Nonplused on 01.22.17 at 7:16 pm

PS still on the immigration thing (and surprisingly not carbon taxes for a change), Canada, like the US, is a country built by immigrants. What happened was the British conquered the territory (and for now we just won’t go into what a genocide that was) and now had a bunch of land and no-one to farm it. So not only did immigration make sense but it was the right thing to do economically. That can still be the case today at times because NA birth rates aren’t that high, so as the economy expands workers are required and you have to get them from somewhere. But here in Alberta our unemployment rate is around 10% right now. We don’t need anyone moving to Alberta right now because we do not have jobs for them and indeed I expect the net inflow to be negative for a couple of years.

Oh I couldn’t resist it back to the carbon tax this is only going to make matters worse, as what manufacturing we do have moves over the border to Saskatchewan. Go Riders! Regina might actually be a real city in about 10 years, and instead of Stampeders games where the crowd is 1/3 dressed in green, Riders games will have a crowd 1/3 dressed in red and black.

Interesting times.

#44 DON on 01.22.17 at 7:22 pm

In the Victoria news. 6 jobs thus far.

http://www.timescolonist.com/business/big-technology-employer-trims-workforce-1.8278841

Big employer cutting jobs in Victoria, after taking over the company

A change in focus at Schneider Electric’s head office has resulted in some job losses at one of Greater Victoria’s largest high-tech employers. The France-based company said the local job losses were the result of “a global reorganization” and that the six positions affected at this point were across various departments and levels of seniority. – See more at:

http://www.timescolonist.com/business/big-technology-employer-trims-workforce-1.8278841#sthash.pPaFLrVY.dpuf

A sign of the times or just a minor occurrence. My thoughts go out to those who lost their jobs. Good industry. I hope the company stays in Victoria.

#45 When Will They Raise Rates? on 01.22.17 at 7:28 pm

#30 Said Every Bear on 01.22.17 at 6:42 pm

“So glad I have zero debt. Yes, I intend to vultch. I just hope the government doesn’t do anything rash…”

So said every prospective vulture wannabe since 2009.

You do realize it will be many many years before prices come down to a point where vultching will make sense right? I hope you do not have a family or need to move in this insane rental and housing market.

You hope the government does not do something rash? Really? The lesson for the past several years is that government policy has jerked the market all over the place. Have you been following the mixed messaging in BC – lets tax foreign buyers (good) and then try to re-inflate the market with a new homebuyers loan program (bad).

Expect the same in Ontario in 2019 once prices soften then (yes, it looks like Smoking Man again is the only one to call the timelines for, and ascent of, the TO market).

Good luck vultching – see you in 2025.
————–

Assuming the Toronto bubble bursts this year (and I think it will based on the observed beginning stages of a parabolic rise in prices, just like Vancouver circa spring 2016), I’m predicting that the particular area I’m interested in (not 416) will be on fire-sale, close enough to a bottom to make sense, in 2020. Of course with one caveat – government interference is a wildcard that cannot be predicted. I realize this, but house vultching is not the be all and end all for me, just a nice opportunity to buy low. When the opportunity arises, I will be one of the relatively few that will be in a position to vultch, whenever that is.

However this plays out, my housing situation is secure indefinitely. I’m patient.

#46 the ghost of President William McKinley on 01.22.17 at 7:30 pm

“Under free trade the trader is the master and the producer the slave. Protection is but the law of nature, the law of self-preservation, of self-development, of securing the highest and best destiny of the race of man. [It is said] that protection is immoral…. Why, if protection builds up and elevates 63,000,000 [the U.S. population] of people, the influence of those 63,000,000 of people elevates the rest of the world. We cannot take a step in the pathway of progress without benefiting mankind everywhere. Well, they say, ‘Buy where you can buy the cheapest’…. Of course, that applies to labor as to everything else. Let me give you a maxim that is a thousand times better than that, and it is the protection maxim: ‘Buy where you can pay the easiest.’ And that spot of earth is where labor wins its highest rewards.”

#47 Mark on 01.22.17 at 7:33 pm

Wow, that’s delusion, expecting a house they bought for $1.7 to have actually gone up in a declining housing market. I personally suspect they need to unload, and “think” that the market is going to cover their closing costs from the purchase transaction. Good luck with that, lol.

On that note, let me welcome myself back from a well deserved 2 week hiatus / medical leave from the blog comments section. Lol! Most of it spent in delusional Vancouver, where there are still some incredibly decent people who are very frustrated with the situation.

#48 Rant of the Day on 01.22.17 at 7:45 pm

It’s always interesting watching “Face The Nation”. Today they had the usual MSM putz still crying about Trump’s “infatuation with the Kremlin” and a host of other imaginary and delusional things. The bozo was a perfect example of how the Democrats hubris, sense of moral superiority and super-entitlement led to their downfall. Hillary was a fatally flawed and carcinogenic candidate, the product of a flawed and carcinogenic system. The system gave birth to Trump and Obama was his godfather. But yet they still think it’s all Trump’s fault. No verdical awareness amongst the chattering classes.

I thought it was quaint that three of the four commentators were baffled by Trump’s lack of magnanimity to the vanquished in his speech. Only one guy was waking up to reality when he said that Trump wasn’t playing to the elites.

As to Trump going after Canada in free trade, I highly doubt that anything will change. Imagine three gunslingin’ cowboys sitting at a table in the saloon playing poker. Two of them are playing it straight and following the rules. The third one is cheating like crazy. Who do you think gets shot? It’s that simple.

The Don just ain’t that deep and could care less about how the optics play to the elites. He will take Mexico to the woodshed and leave Canada alone. If anything we may benefit from his non-selective rule enforcement as anyone else sitting down at the table will know what the rules are.

Regarding climate change, it’ll be only a matter of time before people do the math and figure out that poor people pay FAR MORE for the expensive energy that green policies demand. Rich people are net beneficiaries. Case in point is the Tesla car. Poor people pay carbon taxes so rich people can get a government subsidy to buy one. Then poor people pay higher electricity costs to subsidize the cost of the electricity to recharge one. Today’s Green policies are a transfer of money from the poor to the rich. Nothing more. The environment gets not one speck cleaner with trillions of green payments.

Meanwhile Trump is busy taking off the chains and handcuffs of Green Tyranny while T2 looks for more chains to tie us down with. T2’s day is coming too. As Kevin O’Leary said “Don’t paint 24 Sussex until you check with my wife about paint colors.”

And that’s my rant for today.

#49 Doug t on 01.22.17 at 7:45 pm

It’s a whole new world – old economics and models are obsolete – and next up block chain crypto currencies – things are changing- not for the best either – once they go cashless they will have us all by the short hairs

RATM

#50 BC Rain on 01.22.17 at 7:48 pm

“In short, there’s no economic or financial reason why house prices should rise. There are many why they should fall. But I give up. What’s logic got to do with it?”

Exactly. This is where the Chinese Dudes effect comes into play. But, you seem to ignore it – until Vancouver proved you wrong.

Not quit. Van confirmed that all it took was for one part of the real estate meme to change to topple the cards. — Garth

#51 Trumpfortheages on 01.22.17 at 7:52 pm

“The wolves are circling, licking their chops…

The aftermath will be glorious for those who have followed Garth’s advice and stayed liquid.”

Depends upon how long you have been following said advice. For those that bought six years ago there is no correction that would take back the massive equity that has been accrued.

Toronto real estate is due for a correction just like the stock market. The rental market is also frothy with a vacancy rate of less than 1%. Pick your poison.

Stock market corrections are normally over in a few months. The last one in Toronto took a decade and a half to restore. — Garth

#52 Darryl on 01.22.17 at 8:01 pm

#22 TurnerNation on 01.22.17 at 6:14 pm
Just roll that CMHC premium into the Amort. 2% interest rates, not going uppa soon.
Re. Vancouver Salt Riots, I learned in some places they are adding flouride into table salt! (Killing us softly.)
So, I examined all sides of my Windsor Salt/Sel box.
It has four ingredients. Wanna know what its third one is? It’s SUGAR. That’s right, they add sugar to salt.
If anyone doubts our food supply just is another weapons delivery system to our Military Industrial complex…
Sugar is highly addictive. Of course they’ll sell us also on costly diabetes treatments.
—————————————————————–
I went to the kitchen to confirm this and sure enough it shows sugar in the ingredients . However it also shows zero calories so it don’t get it .

#53 Berniebee on 01.22.17 at 8:10 pm

# 8 Hawk

“….who had to acknowledge their already proven falsehood that he removed Martin Luther King’s bust from the White House.”

Yep. Trump had the bust moved from it’s usual spot to another part of the room, and the author missed it and stupidly reported that it had been removed.

But that’s the difference between Trump and the media (or anyone else.) Trump has never admitted a falsehood or mistake and never will.

“The point is, you can never be too greedy.”
-Donald Trump

#54 Nemesis on 01.22.17 at 8:12 pm

“Immigration this year will be between 280,000 and 320,000, with most being economic immigrants.” — HonGarth

#OeconomicaMigrantium…

[SCMP] – In Vancouver, Quebec millionaire migration has gone from real estate ‘conspiracy theory’ to premier-level concern: Should new millionaire migrants forfeit their C$800,000 ‘investment’ if they do not submit Canadian tax returns, and show they live in Quebec?

http://www.scmp.com/news/world/united-states-canada/article/1998883/vancouver-quebec-millionaire-migration-has-gone-real

#55 I don't know on 01.22.17 at 8:20 pm

“Now, to be fair, houses listed and selling for $1.5 million and more are not the norm. The average detached 416 property commands $1.286 million and in 905, where the drywallers live, it’s just $934,000. The average price across the GTA (condos included) is $730,000, which is 17% higher than a year earlier.” – Garth

——————————————————–

And for the last eight years you have been predicting lower prices. You also predicted a loss for Donald Trump. My point, no one can predict anything. I would say buy in Toronto if you need a place to live and forget about the market correcting. Waiting for the last eight years has been a fool’s game.

#56 economic on 01.22.17 at 8:26 pm

Immigration this year will be between 280,000 and 320,000, with most being economic immigrants. — Garth

Is this a lot or not? Who decides?

#57 DON on 01.22.17 at 8:33 pm

I was browsing through the listings in retirement mecca and the prices are out of this world, only sellers in Vancouver and Toronto can afford these prices. Can’t get any new doctors to the area – health authority is 10-12million in the hole with 2.25 months remaining in this years budget.

People are selling but living in vacation rentals unable to buy in…Yikes

This is not good news in towns where the growing business in the local funeral home. Their business sad to say has skyrocketed in the last 5 years (know the owner). Without any sound economic principles shoring up the housing market and jobs going to the US…we are in for a repeat. Houses in qualicum have started to stay on the market longer since the summer – when they were selling like hot cakes.

Victoria City council has put of the decision to ask the Prov Gov to apply the foreign home buyers tax for three months. Is someone expecting something to change and waiting for it?

#58 H Epstein on 01.22.17 at 8:38 pm

Midtown is already the best area of Toronto to live in. Of course people want in. Especially ‘new money’.

#59 For those about to flop... on 01.22.17 at 8:41 pm

The Orange Octopus said his senior staff had the highest IQ of all the people to have held these positions.

And yet they had to re-start the swearing in ceremony because half of them forgot to raise their right hand…

M42BC

#60 Pete on 01.22.17 at 8:42 pm

There is no risk on 01.22.17 at 5:13 pm
banks create the loan money out of thin air so the ethereal (loan) is collateralized on the real (estate) therefore, CMHC is, hoax maintenance the hoax is that there was any risk to the lender there is none a lie believed by everyone is not the truth
————————————————-
Someone who understands. Too bad so few people do.

#61 just say no on 01.22.17 at 9:20 pm

I was just looking at beaches in Toronto and guess that must be why houses are soaring? If I was a realtor I would be marketing that! Canada’s Dubai! Look at all that flat sandy beaches! Nothing like that on the west coast. Soft sand that is what makes Toronto so desireable….I see now houses still very cheap in Toronto so keep paying more…Toronto is so so amazing and you do not want to miss out…summer is coming. Think it is like honolulu! Make that offer today…I should be a realtor?

#62 Traveler on 01.22.17 at 9:31 pm

Move up buyers?

This is a top down boom. All built on foreign money buying 416 and licals who sell buying further out and pocketing the rest.

Toronto is Vancouver a decade ago.

#63 hope & ruin on 01.22.17 at 9:33 pm

#47 Mark on 01.22.17 at 7:33 pm

On that note, let me welcome myself back from a well deserved 2 week hiatus / medical leave from the blog
_________________________

How I feel when Mark returns to the blog:

https://www.youtube.com/watch?v=NHh0rf0ojEc

#64 Leo Trollstoy on 01.22.17 at 9:35 pm

Toronto real estate prices aren’t coming down. It’s the only Canadian city that people know

#65 mark on 01.22.17 at 9:40 pm

How low will canadian oil and gas go under the trumpster!

http://business.financialpost.com/news/energy/its-blindsided-everybody-new-u-s-border-tax-could-shut-out-canadian-oil

#66 Leo Trollstoy on 01.22.17 at 9:46 pm

Toronto real estate is BOOOMING!!

#67 Naive Question on 01.22.17 at 9:50 pm

Looking at the chart at the end of the post, it seems that prices rarely ever actually go down, they just go up at a snail pace sometimes.

Other than a few years around 1961 and 1991, every crash still kept a positive percent change in price, so prices increased (if slower than homeowner would have wanted).

Also, in a previous post there was a chart showing the average house prices going back quite a while. If you look at it, on every long-term period (over 25 years), prices always recovered. Even buying at the peaks, if one waited 25-30 years before selling prices recovered well.

If we say we like to track the market since statistically it goes up 2 of every 3 years, and if we say we like to invest in the long time frame, than why is real estate being bashed so harshly? If one invests in real estate with a 30 years time horizon, the average prices show a relatively similar chance to gain good returns.

Now, I get the fact it is work and cost money to hold RE and that it is not an easy asset to liquidate in time of need, but the fundamental return seems similar to market-tracking ETFs.

#68 CMHC - is it a hoax? on 01.22.17 at 10:07 pm

#60 Pete on 01.22.17 at 8:42 pm
There is no risk on 01.22.17 at 5:13 pm

banks create the loan money out of thin air so the ethereal (loan) is collateralized on the real (estate) therefore, CMHC is, hoax maintenance the hoax is that there was any risk to the lender there is none a lie believed by everyone is not the truth.

Garth would you kindly share your view on this train of thought?

It sounds like a compelling argument.

#69 Andrew Woburn on 01.22.17 at 10:17 pm

#53 For those about to flop… on 01.21.17 at 8:12
Nanaimo price reductions have picked up in pace with 48 reductions and 3 increases for the month of January,as reported the other day the average reduction is small but the overall numbers are telling.
===========================

I’m not seeing this trend yet in higher end Nanaimo SFH but that doesn’t mean it won’t happen as the air comes out of the YVR gasbag and retirees get less of a windfall.

I agree with your caution to prospective buyers of Island properties. It is too easy to think they are cheap if you are coming from the GTA or the GVA but they are not in relation to family incomes which are probably still relevant here. There are not a lot of “Chinese dudes” around, and if prices start to flatten out, there won’t be.

My guess is Nanaimo is probably going to be little more price stable than Victoria over time. Nanaimo is no longer the mill town of legend. It is still working through an image problem but more seniors are discovering that it’s a great retirement city. Victoria has always been Canada’s retirement mecca but it is growing younger, busier and less convenient for the elderly. As I see it, the proportion of new buyer retirees with solid equity will trend higher in Nanaimo than in Victoria. There the younger buyers will boost the economy but will be more vulnerable to hikes in mortgage rates. If you can’t wrap your head around the term “young” in relation to Victoria, the local rag has a story this weekend about a lack of kindergarten spaces.

#70 robert james on 01.22.17 at 10:18 pm

#50 BC Rain…………….

“Exactly. This is where the Chinese Dudes effect comes into play. But, you seem to ignore it – until Vancouver proved you wrong. ” ——————————— Not quit. Van confirmed that all it took was for one part of the real estate meme to change to topple the cards. — Garth——————————————————- The Chinese dudes not driving up lower mainland real estate may be a case of “alternative facts”

#71 Stock Picker on 01.22.17 at 10:20 pm

Nothing is going to stop this insanity until a normalization of interest rates. Paying two million for a twelve foot wide bung is all and only possible by “emergency rates” ….. symptomatic of a libtards economy.

However…Justinian handlers are setting him up as a force against Trump….good luck with that. Canada’s original name will really apply after Trumpnomics rolls us into the liberal septic system . Aca Nada we were…and return to nothing we are headed.

#72 Bottoms_Up on 01.22.17 at 10:45 pm

#56 economic on 01.22.17 at 8:26 pm
—————————————–
The GTA is adding a million people per decade, if not more.
That is consequential for real estate prices as well as traffic congestion.

#73 Berniebee on 01.22.17 at 10:49 pm

#55 I Don’t Know “My point, no one can predict anything…”

No one can predict exactly when house prices will fall, but prices do fall. After this long rocket climb, Toronto’s prices will inevitably revert to the inflation curve or even below. It has happened before and it’s overdue.

In an area where million dollar houses plus are common, your advice to ” forget about the market correcting” is a prescription for financial disaster.

#74 Rexx Rock on 01.22.17 at 10:54 pm

DELETED

#75 For those about to flop... on 01.22.17 at 10:54 pm

#44 DON on 01.22.17 at 7:22 pm

Sign of the times or just a minor occurrence. My thoughts go out to those who lost their jobs. Good industry. I hope the company stays in Victoria.

////////////////////////

Hey Don,just wanted you to know that I’ve been reading your messages to me and thanks for sharing the information.

I just try to fact find ,but if I see something I think I can help someone out with , I try to share it because a lot of the talk here revolves around Vancouver and Toronto.

Also, while I’ve got you and your speaking of thoughts going out ,its a sad deal with what happened to that 9 y.o dying in your neck of the woods…

M42BC

#76 Happening now on 01.22.17 at 11:14 pm

Lights are not out vancouver. …still plenty of $$$ moving around !!

#77 bigtowne on 01.22.17 at 11:19 pm

Governor Poloz does not see inflation. I treat myself to a nice cup of brew from Starbucks which has gone up more than 10% in the past two months so we can extrapulate the Governor is not a coffee man. Of course, filling up the tank has gone up a noticeable horror.

The Americans have a vastly different “take” on success than our “carbon tax/climate change crew”. All those yeehaws down in Texas all putting up IPO’s on the ‘change. Getting a hotel in West Texas is no $35 Motel 6 charge…Dang that shale sure put a shine on America.
I luv those kidz up north dontcha no. Yessirree Bob.

#78 For those about to flop... on 01.22.17 at 11:22 pm

Hey WOEY ,yes you are right most of the reductions are at the lower end of the market in the Nanaimo area.

Of the reductions only 20% of them are on the properties seeking more than 500k and the amount being deducted is a paltry amount averaging 13k but having said that with the numbers being so lopsided 48/3 it could be the start of something bigger.

Enjoy your evening…

M42BC

3315 Hammond Bay Road, Nanaimo
Nov 17:$949,000
Jan 6: $900,000
Change: – 49000.00 -5%

#79 Ponzius Pilatus on 01.22.17 at 11:41 pm

#33 WUL on 01.22.17 at 6:54 pm
Yesterday’s civil tone here for Ryan is off the table tonight. Also, SM is back after yesterday’s nuptials.
—————
Of course, most blogdogs have no clue what the graph and chart boy is saying.
So they play nice as not to look stupid.
Sucking up, that’s all I can say.
Hoping for a free bone of advise.
Pathetic.

#80 WUL on 01.22.17 at 11:45 pm

9 Ontario lads on the Flames active roster. 8 Ontario boys suiting up for the Leafs on Monday night. Yes, it will be two points for Canada’s Team but the ACC crowd should really look in the mirror.

#81 Landlords rule in Toronto .. on 01.22.17 at 11:45 pm

Incredible rental income streams ;

Basement : $1700
Main floor :$2300
Top floor ;$2100

Rent prices are not dropping

#82 MF on 01.22.17 at 11:47 pm

For you Smoking Man:

Watch the Liberal woman scream in agony as trump is sworn in.

https://www.youtube.com/watch?v=SRvX0rCEPA8

MF

#83 MF on 01.22.17 at 11:52 pm

#56 economic on 01.22.17 at 8:26 pm

It’s low. Yup I said it.

I live in the GTA and I see the quality of immigrants that we get. Vast vast majority as eager to become Canadian and work their asses off. They don’t complain they just do it.

All these idiots on here complaining about Canada and comparing it to some third world crap hole forget that the boring lifestyle of Canada is what the vast majority of human beings crave. Perfect for raising a family….the goal of most immigrants, actually.

MF

#84 For those about to flop... on 01.22.17 at 11:58 pm

Happening Now #76
Lights are not out vancouver. …still plenty of $$$ moving around !!

////////////////////////////////////

Where I come from someone not telling the truth is “talking porkies” ,either that’s what your doing or you are misinformed.

Vancouver proper, is comatose at the moment with only 194 sales in the last month compared to 559 at the same time last year before the rush to the summit in which there was a feeding frenzy of over 3000 properties sold.

What’s happening in Vancouver at the moment cannot be blamed on lack of inventory as there are more properties on the market than at the same time last year and only a few hundred less than in the Spring Fling.

Also in Vancouver proper the average sold price has come down 27% in the last 9 months with some suburbs and surrounding cities suffering worse.

Things are most likely to speed back up soon, but right now it’s not happening…

M42BC

https://www.zolo.ca/vancouver-real-estate/trends

#85 traderJim on 01.23.17 at 12:07 am

With inventory so low Toronto prices are going to go insane, as so few properties will actually change hands.

Media will continue to focus on the ones that sell for hundreds of thousands over asking.

Everyone will think all houses in the city are now worth what the few that sold at ridiculous prices went for.

Going to be fun!

#86 WhoLikeShortShorts on 01.23.17 at 12:07 am

Wife had friends over tonight. Of course, the conversation turned to real estate being Vancouver. The husband is going all in, with the first time incentive( election bribe ) by the BC government. Also said he would buy in Calgary and Toronto in a heartbeat because it’s so much value compared to Vancity. He believes prices will never go down since the marketing has been moving up so long. I just smile and nodded. Lambs to the slaughter house.

#87 lin on 01.23.17 at 12:14 am

We noticed a significant increase of activity in our neighbourhoods from foreign buyers especially after B.C. Premier Christy Clark introduced a 15 per cent tax on foreign nationals in August 2016 which cooled the housing market in Vancouver driving many foreign buyers to Toronto.
http://josiestern.com/real-estate-blog/2017/01/stern-estate-report-2016-compared/

#88 OffshoreObserver on 01.23.17 at 12:54 am

And my 29 year-old GF met me in Saigon on the way back from Hong Kong. I bought her a house in Da Nang for about $25,000. More about this later…

#89 Vancouver ranked third most unaffordable housing market in the world on 01.23.17 at 1:04 am

In the fall of 2016, the UBS Global Real Estate Bubble Index ranked Vancouver with the world’s worst real estate bubble risk thanks to “stimulated Asian demand” and “loose credit conditions.”

#90 marelene on 01.23.17 at 1:04 am

In the fall of 2016, the UBS Global Real Estate Bubble Index ranked Vancouver with the world’s worst real estate bubble risk thanks to “stimulated Asian demand” and “loose credit conditions.”

#91 Fortune500 on 01.23.17 at 1:16 am

FF 45, Great Article. Very succinct. Thanks for sharing!

#92 No Canada, No on 01.23.17 at 1:32 am

Wow, Garth is throwing in the towel
The end must be very close.

#93 jane24 on 01.23.17 at 3:03 am

64 – Leo Trollstoy

I travel extensively as live in England so easy to be somewhere else in 2 hours, and you are right, no matter where I go, the only city in Canada that anyone has heard of is Toronto. Vancouver and Montreal are unknown.

Note that when I immigrated to Quebec in 1967 as a small child, Montreal was the biggest city and the financial heart of Canada and Toronto was considerably smaller. Then we had the separation movement , the Anglo and Jewish businesses left town and the rest is history. TO boomed and Montreal was left far behind and still is. Shame as a beautiful and unique city in the summer!!

#94 Euro observer on 01.23.17 at 3:12 am

Resting from the heavy work of ‘insuring’ ultra subprime mortgages:

https://ca.yahoo.com/news/trudeau-not-first-politician-face-180004896.html

#95 Trump Salvo Fired at NAFTA on 01.23.17 at 3:33 am

Fresh off the press:

http://www.cnbc.com/2017/01/22/trump-says-to-start-renegotiations-on-nafta-with-canada-mexico.html

If I were Trump and Ross, I would go for a Border Adjustment Tax (BAT) across the board on ALL imports – about a 25% tax per Garth.

BAT – a lot less work vs. being selective and renegotiating on a country/industry basis. Walk away from NAFTA completely (why waste time on renegotiating that agreement which was years in the making when you can hit everybody equally, right away and in 1 fell swoop with a BAT). Pick up the broken pieces afterwards, as is usually done.

Commerce Secretary and long time Trump friend Ross is skilled at bankruptcy turnarounds (how he made his billions), he will know where the jugular is and how to slash it. In his profession, he had to be ruthless to win and win he did.

Who knows in the end, Trump is unpredictable but with Ross as his attack dog, I am in fear of what they will do.

Why “feminist” T2 changed his cabinet recently, fear of Trump (http://www.theglobeandmail.com/…/trudeau-t…/article33554223/).

bsant

#96 Self Directed on 01.23.17 at 3:36 am

#81 Landlords rule in Toronto .. on 01.22.17 at 11:45 pm
Incredible rental income streams ;

Basement : $1700
Main floor :$2300
Top floor ;$2100

Rent prices are not dropping
…………………………………………………..
Alternative truth. Phake. Why is the main floor fetching more rent than the top floor? No one wants to listen to the guy above you. Top always rules…. See condo pricing.

True. In the Garth bible, it says “Love thy landlord. He carries the risk.”.

#97 Stock Picker on 01.23.17 at 5:37 am

Trump announces the start of renegotiating NAFTA begins today. Trudeau won’t get a bum hug and a selfie …Canada and Mexico have been summoned to the capital of the empire….and right now. Trudy is way over his head …. no time to tour his silly ideas and poll a strategy….Gerald Butts is going to have to knee jerk a response for Trudeau libtards. Trump says he’s ripping up NAFTA regardless of Canada and Mexico . Our media said it wasn’t going to happen , that Trudeau was communicating and Trump would be layer for time to talk….ain’t gonna happen…we’re tied to Juniors market and we’re screwed because of the snowflake and union libtards

#98 Stock Picker on 01.23.17 at 5:57 am

News flash…..among the thousand last minutes orders Obama sent out was an order to Justin Trudeau to stop the NFL from streaming game commercials on Canadian television. What else did Trudeau agree to? The plan was agreed to allowing real time showing of the famous commercials….Obama didn’t want us to see. But job… or what?

#99 westcdn on 01.23.17 at 6:59 am

What a woman! At this stage, I don’t know whether to fight her or love her.

https://www.youtube.com/watch?v=Pq0lVAKb1vI

#100 Tonyw on 01.23.17 at 7:37 am

Toronto average house price increases peaked in March 1989, not in 1987 as noted on the graph…
I know, I was there.

The chart’s title is “Yearly price changes” and indicates the velocity of price increases, not the price peak. That, indeed, was in 1987. The chart is correct. (BTW, you must be really old…) — Garth

#101 I love real estate on 01.23.17 at 7:57 am

Garth, when will you learn that your alternative facts simply don’t cut it?

Real estate will keep going up in the GTA, leaving only losers behind.

Millions of Asians will arrive here in the next 20 years, all of them wanting to buy homes.

Get in now, or be left behind forever, sleeping in your parents’ basements.

The choice is clear.

The alternative facts of the naysayers are nonsense.

#102 Penny Henny on 01.23.17 at 9:29 am

Mr Garth, if I didn’t know any better I would say it looks like you have been house hunting. You went to another open house this weekend?

#103 Penny Henny on 01.23.17 at 9:31 am

or maybe you just go for the free cookies?

#104 Penny Henny on 01.23.17 at 9:38 am

It guarantees prices this spring will rise even as sales start to crumble -Garth

Oh my! Garth calling for higher prices?
The end is near.

#105 cramar on 01.23.17 at 9:56 am

“ALTERNATIVE FACTS”

The new buzz word of the Trump administration! Did he learn this from Canadian RE boards? Or maybe RE boards learned it long ago from The Donald.

Sorry Mr. POTUS, but humans do have eyes to see the difference:

http://www.pbs.org/newshour/rundown/comparison-president-trump-and-barack-obamas-inauguration-crowds/

#106 Ret on 01.23.17 at 10:23 am

http://www.thespec.com/news-story/7078473-hamilton-stands-in-solidarity-with-the-world-at-women-s-march/

Check out the sign the group is holding, “Woman’s Place is in the Resistance” What resistance would that be?

There are some male traitors in the group too along with what appear to be recruited child “soldiers.” Perhaps the authorities need to move in to save these poor children.

Everyone is entitled to their opinions. This is Canada. Seriously, is this where this country is at or are these just Hamiltonians acting like…well, Hamiltonians.

#107 Sheldon Cooper on 01.23.17 at 10:33 am

So we live in Vancouver and have 800-900k equity in our town home. Not even sure anymore as nothing is moving. We have 1.3 million in dividend paying stocks and ETFs and index funds. We browse listings and come across a nice home listing for 2.4 million. Now things are selling for 15-20% off ask price these days in our fair city so even if I could get this place for 2m, with an 800k down payment (40%) we would need a mortgage of 1.2 million with our current mortgage rate of 2.3%. With taxes and insurance this works out to 6k a month. This is excluding maintenance etc. we do not want to be landlords and this house doesn’t even have a rental suite
anyway. And of course rates are going up. And also the payment is in of course after tax dollars. The way I see it right now, there is so much risk in Vancouver real estate that I would not touch it with a ten foot pole. Real estate lovers will disagree but in my opinion, there is more risk in Vancouver real estate than in the stock market right now. I have no idea what that house is really worth. Is it really worth 30% more than in 2015? Who says? Some idiot who will pay from China? Or idiot Canadians?

#108 IHCTD9 on 01.23.17 at 10:36 am

“To afford this micro slice of designer bliss a buyer would need 20% down – about $400,000 – pay another $68,200 in non-refundable land transfer tax, then assume a $1.52 million mortgage with monthly payments of $7,000 a month (or almost $8,000 with property taxes and insurance included). That would require an income of close to $300,000. The bank interest alone totals $3,300 a month.”
___________________________________________

It would take a special kind of stupid borrow 1.9 Mil for something half the width of my laundry room. An entire 6 figure income swallowed for decades on end.

No one would pay this price to live in it. Bought 7 months ago and it’s on the market again? Not waiting 1 year to harvest tax free capital gains?

Yep, specuvestors, and they’re scared too.

As they should be. Houses like this at these price levels could only be sold to those who believe they’ll keep going up. That belief is increasingly requiring the faith of an Old Testament Patriarch and then some.

Once NAFTA is re written, the border tax adjustment change is in, and who knows what else – all these folks in the GTA who bought in 2016 for 7 figures are going to get absolutely steamrolled. Stuck in a negative equity situation permanently, better not lose that 6 figure income. In fact, better find an even better one – rates are going up.

#109 Uh Oh, Chinese Astrologer Prediction on 01.23.17 at 10:54 am

“Some stars are good for property, and some stars are bad for property,” Tai said. “This year, the bad star is going into the house.”

Abandon the YVR RE Ship!!

http://www.scmp.com/news/world/united-states-canada/article/2064552/lunar-new-year-bright-metals-oil-bc-liberals-canada

#110 Doug in London on 01.23.17 at 11:20 am

I’ve been following this blog for almost 7 years now. So far, the outrageously bloated GTA housing market hasn’t corrected yet. Does that mean Garth has been wrong about his predictions of a correction? That’s quite possible, but being 56 years old and having seen many asset bubbles before, I think this GTA market which continues to defy economics and common sense shows there are still a lot of greater fools out there.

If you are a person with some common sense and half decent judgement, you grossly underestimate how foolish and irrational some people can be. I think a lot of real estate analysts, not just Garth, have made this incorrect judgement. I confess, I’ve also made this mistake.

#111 Ana on 01.23.17 at 11:25 am

I was reading some articles about Robert Shiller today and this quote reminded me of smoking man…

“Shiller feels economists should engage in major quantitative studies of developing popular narratives through textual analysis of internet searches, online mentions, Twitter trends and by mining other sources of big data.”

#112 Stock Picker on 01.23.17 at 11:28 am

DELETED

#113 For those about to flop... on 01.23.17 at 11:33 am

I shared this chart with another poster the other day,but one thing I forgot to mention is with the 2018 Winter Olympics in Pyeong Chang ,South Korea and the 2020 Summer games due to be held in Tokyo ,Japan this part of the world could be good to do some investing in or staying clear of ,depending on your view on this matter…

M42BC

https://howmuch.net/articles/olympic-costs

#114 Braj on 01.23.17 at 12:12 pm

#39 Freedom First on 01.22.17 at 7:05 pm Yes. I like the mortgage insurance rates going up. Not enough, but it’s a good start. As I said recently, I just became diversified, liquid, and unbalanced. I am overweight cash the same way I was 1 year prior to the GFC. Canada is in trouble. The US is expensive, and uncertain

What’s your definition of overweight in cash?

#115 Euro observer on 01.23.17 at 12:21 pm

#100 I love real estate on 01.23.17 at 7:57 am

—————————-
Nice try, I guess real estate agents are getting pretty hungry already, not many sales these days.

……………………

Garth, when will you learn that your alternative facts simply don’t cut it?

Real estate will keep going up in the GTA, leaving only losers behind.

–>
Sure, Let’s then abolish CMHC and transfer the mortgage liabilities to the rock-solid-prudent-lenders/ banks.

…………………..

Millions of Asians will arrive here in the next 20 years, all of them wanting to buy homes.

–>
Oh, I forgot, those were the ‘wealthy’ foreigners rushing to the ‘rich’ /sarcasm off white north, not workers on minimum wage coming to the workers ghetto that GTA is.

………………………..

Get in now, or be left behind forever, sleeping in your parents’ basements.

The choice is clear.

The alternative facts of the naysayers are nonsense.

–>
Living in basements is a Canadian invention. There is no other nation in the world (even in Africa) where people live under the ground (probably due to space limitations ?!) despite the deadly gasses (e.g Radon) while boasting about health and health care.

The choice is indeed pretty clear – either demand the good life or move of the s..thole called GTA to find it elsewhere.

The smart and capable well do it.

#116 Euro observer on 01.23.17 at 12:25 pm

elevation of stupidity to new levels:

https://ca.finance.yahoo.com/news/vancouver-housing-3rd-most-unaffordable-044147752.html

#117 Metaxa on 01.23.17 at 12:25 pm

Alternative truth, alternative fact leads to alternative justice, alternative society.

Only the intellectually bereft willingly embrace such potentially divisive and damaging social forces.

#118 Euro observer on 01.23.17 at 12:34 pm

From another angle:

It will be deeply satisfying to watch the idiots in GTA pay for the:

-largest debt by non-country entity in the world (Ontario)
-multiple land transfer taxes (city, province,….)
-ever-increased property taxes
-higher hydro fees, I love particularly the ever-growing delivery charge.
– higher transportation costs.
– the new carbon taxes
– the increase in CPP
– the declining quality of the health care system and the introduction of payd services (dental and heap replacements is already paid in the ‘free’ health care system)
– the lovely real estate agent fees.

due to the failure of policies:
https://ca.finance.yahoo.com/news/ontario-premier-writes-open-letter-184109678.html

Cheer, the rich must be able to pay. So such it up and pay out.

#119 Euro observer on 01.23.17 at 12:38 pm

From another angle (continued):

– I particular love tax on tax like HST on carbon taxes or already existing gas taxes.

Paid by people on fixed income with depreciating currency and skyrocketing food prices.

#120 Ace Goodheart on 01.23.17 at 1:18 pm

I think you need to show us where that 1.89 million dollar 12 foot wide house is located. It looks similar to those old late 1800’s era houses down the street from the distillery district.

A house like that in the right neighbourhood in Toronto is worth well over 1.8 million. It is all about location. The price isn’t high, in that case, due to cheap money. It’s high because some dirt in Toronto is just golden. Location, location, location. That same house in South River, Ontario would be worth about 15K.

#121 Peter Earlmun on 01.23.17 at 1:23 pm

Garth, have you seen the latest news on Bloomberg…”Bond Buyers Grab Disappearing Bank Debt Ahead of Canada Bail-In.” I know you covered this issue some time ago, but wanted to advise you.
Thanks for your great articles.

#122 Ace Goodheart on 01.23.17 at 1:24 pm

Btw my house is 12 feet wide. Been livin’ 12 feet since 2012 and loving every minute of it. Big houses mean big heating bills, endless cleaning tasks and lots of walking from place to place. Small is better…..

#123 Bat Flipper on 01.23.17 at 1:26 pm

Trump isn’t messing around. Probably don’t want to go getting yourself into a ton of debt with the USA threatening to take away a good amount of jobs and sink the CAD. Foxxconn gets it:
http://www.usatoday.com/story/tech/news/2017/01/23/foxconn-may-build-7b-plant-us/96945414/

#124 Ace Goodheart on 01.23.17 at 1:30 pm

RE: various Trump (aka “the Donald”) comments: Trump is in the process of ripping up and pulling out of various trade agreements. He’ll likely do the same with NAFTA.

Why should we care in Canada?

Because the man is a moron. He rivals George W Bush. Consider: who is the USA going to trade with? Does he really think that if he bans all imports of either finished goods or goods to be finished in the States, he is going to create prosperity? Like North Korea did with their “Juche” idea?

Remember what happened when the USA embargoed Cuba? Canadian travel businesses and Canadian corporations and the like, got rich doing business in what became a “USA free trade zone”.

Now Trumpster wants to do this to the rest of the world. Wonderful. So Canada can negotiate trade deals with everyone else, and we don’t have competition anymore, as the USA has decided to be an isolationist regime, with trade barriers and fully reliant on its own domestic production.

#125 Doug in London on 01.23.17 at 1:31 pm

Why would anyone want to buy a grossly overpriced house in the GTA when there are better bargains to be found? One such bargain is EWW-NY which invests in Mexican stocks. Oh, that’s old news now. This ETF is up about $1.20 (that’s in REAL dollars) from where it was trading on Friday.

#126 };-) aka Devil's Advocate on 01.23.17 at 1:37 pm

BC most unaffordable

It ALL comes down to Supply and Demand.

#127 Ret on 01.23.17 at 1:41 pm

#114 Radon
Many students going to college or university, rent basement rooms for 3-4 years. in addition, there are thousands of basement suites in every large city.

If cellar dwellers have been exposed to radon for an extended period, they may have unknowingly shortened their lives down the road.

Apparently that is okay with universities, renters and municipalities.

#128 mishuko on 01.23.17 at 1:43 pm

Starting to feel resentful to work. I don’t mind that I’m filling in for an account manager (a higher ‘raise’ over temporary acting position… should said hard no) and taking over responsibilities for a senior relationship manager. All I ask is I get a modest salary bump and a title for what I do!

That is the problem with today’s Business in Canada… anecdotal sure but it sure is an attestation to why wage growth has been non existent over the past few years.

#129 InvestorsFriend on 01.23.17 at 1:51 pm

Interest Rates – Another False Start?

The 5 year Canada is down 0.06 to 1.07 today. It had jumped to over 1.20 when the U.S. raised rates.

What is next? Lower mortgage rates?

Never say never.

Rate reset prefs hanging onto recent gains but will that continue with the 5 year Canada slipping?

Buy prefs for tax-advantaged dividend income. I thought a smart guy like you knew that. — Garth

#130 JimH on 01.23.17 at 2:04 pm

#8 Hawk on 01.22.17 at 5:22 pm
“Donald’s Trump’s credibility is indeed low, but still a lot higher than the MSM covering him whose approval is hovering at 14%…”
=================
Actually, Hawk, your credibility just took a huge nose dive, too!
The “14%” you quote above referred to 14% of Republicans… a drop from 32% one year ago. No surprise there!

#131 46 and 2 on 01.23.17 at 2:16 pm

Hopefully the big banks and the grip of the CRTC will be on the bargaining table when Trump et all start to step all over T2.

Our “leader” is about to get his ass handed to him, just watch him throw Alberta under the bus first chance he gets.

#132 rainclouds on 01.23.17 at 2:26 pm

#127 Mishuko

You have what is called in HR circles as “The Polish Promotion” all the responsibility but no mo money….

Pretty sure if you ask nicely they will give you the coveted “title” though

#133 Metaxa on 01.23.17 at 2:39 pm

RE: various Trump (aka “the Donald”) comments: Trump is in the process of ripping up and pulling out of various trade agreements. He’ll likely do the same with NAFTA.

NAFTA is a Senate ratified, binding treaty.

Trump saying he’s going to rip it up is a lot like some Sovereign Citizen saying he won’t pay his taxes.

Not gonna happen the way either wishes.

This is where you have to delineate between someone’s opinion and someone’s behaviour. Have whatever opinion you want, its how you act that tells me whether you are an idiot or not. Trump is an idiot.

I have more faith in innovation, the true will of the people, the systems of government than many here it seems but the GOP is not about to allow an idiot to ruin their game.

#134 rainclouds on 01.23.17 at 2:39 pm

#92 Jane 24 “I travel extensively as live in England so easy to be somewhere else in 2 hours, and you are right, no matter where I go, the only city in Canada that anyone has heard of is Toronto. Vancouver and Montreal are unknown.”

No doubt the people of England have figured out the best way to quickly disengage is to disavow any knowledge of any subject you may bring up.

#135 InvestorsFriend on 01.23.17 at 2:43 pm

Buy prefs for tax-advantaged dividend income. I thought a smart guy like you knew that. — Garth

Indeed so. And some of the rate reset prefs had very juicy dividends as they were at about $18 while they were issued at $25.

With higher 5 year Canada rates the rate resets had moved higher for a nice capital gain (for those who bought them cheap) on top of the dividend income. Now the 5 year is slipping and the capital gains could evaporate.

Like Garth, I fully expected the 5 year to trend upwards and hoped those rate resets with a year or three to go before reset would rise towards $25.

Now, the 5 year Canada is refusing to cooperate and is down in the past few weeks.

Interest rates have humbled almost every forecaster for many years.

The yield continues, so stop confusing capital gains-producing equities with preferreds. You buy them for cash flow. — Garth

#136 Brian on 01.23.17 at 2:45 pm

Because of Trump, O’Leary will never make it in Canada. Once people see how Trump causes so many problems going forward Canadians will realise O’Leary is just as crazy. I’m not sure the conservative party would make him leader as it would cost them all forty seats in Quebec.

#137 Smoking Man on 01.23.17 at 2:50 pm

#110 Ana on 01.23.17 at 11:25 am
I was reading some articles about Robert Shiller today and this quote reminded me of smoking man…

“Shiller feels economists should engage in major quantitative studies of developing popular narratives through textual analysis of internet searches, online mentions, Twitter trends and by mining other sources of big data.”
….

In other words, Herdonomics.

#138 };-) aka Devil's Advocate on 01.23.17 at 2:52 pm

#130 Brian on 01.23.17 at 2:45 pm

While many have fastened their seatbelts and put their head between their knees in anticipation of a major Trump fail he hasn’t crashed yet and may just surprise us. If he does so it will likely pave the way for an O’Leary win.

It’s been three days, dude. — Garth

#139 };-) aka Devil's Advocate on 01.23.17 at 3:03 pm

It’s been three days, dude. — Garth

Exactly.

Time will tell };-)

#140 IHCTD9 on 01.23.17 at 3:06 pm

2017:

A dead loonie,
A dead(er) energy sector
A dead auto sector
Fading consumer spending
Even more federal debt
Even more Provincial debt
Even more City and municipal debt
Higher costs of borrowing
More taxes
More fees
Higher unemployment
Next to zero GDP growth
Next to zero wage growth
Higher costs for all forms of energy
Higher Property taxes everywhere
Increase cost of living and doing business across the board.

I have no less than 3 projects in the works to offset what’s coming down the pipe over the next 5 years or so. Those with eyes to see but have done nothing had better get on it.

#141 Eaglebay on 01.23.17 at 3:09 pm

#96 Stock Picker on 01.23.17 at 5:37 am
“Trump announces the start of renegotiating NAFTA begins today.”

Thank God you’re not picking stocks for me.
What do you know about the Free Trade Agreement or FTA?

#142 MF on 01.23.17 at 3:11 pm

#135 Brian on 01.23.17 at 2:45 pm

The corollary to your argument is that if Trump does well, then O’Leary is a shoe in. Trudeau lost who knows how much votes when he refused to speak in English to answer a basic question the other day. He has no where to go but down from his 39% of idiots who wanted to punish Harper (how pathetic a reason to vote).

#132 Metaxa on 01.23.17 at 2:39 pm

Idiot? Nope.

He just ran a masterful campaign. Overcame all odds by handily beating the establishment opposition both in his party and the opposing one. The election process may be changed forever thanks to him. It’s time we stop referring to Trump as an “idiot”. He’s far far from that.

The NAFTA issue is also more complicated. He won’t rip it up..that is just a negotiation tactic. If anyone has read “the art of the deal” you will see that he uses this tactic to make his opponent soften up. Not everyone believes NAFTA is so great. A growing chorus of people also think an update is a good thing.

MF

#143 IHCTD9 on 01.23.17 at 3:12 pm

Trump saying he’s going to rip it up is a lot like some Sovereign Citizen saying he won’t pay his taxes.
__

Not quite, no one is going to show up at the USA’s front door to haul them off to jail.

Putting all the legal stuff aside, if Trump says F.i. – we’re out of NAFTA, looks like tariffs are back on the menu boys!

Exactly what is anyone going to do about it that could possibly make Trump think twice?

#144 InvestorsFriend on 01.23.17 at 3:18 pm

Rate Reset Preferred Shares

The yield continues, so stop confusing capital gains-producing equities with preferreds. You buy them for cash flow. — Garth

************************************
Yield is nice. So are capital gains when available. I’m agnostic.

Many rate resets currently at $18 to $20 are going to reset to lower dividends unless the 5 year Bank of Canada rises from current levels. And if it does rise substantially by the reset date then those rate reset prefs are going to rise back towards $25 and we will have to put up with a capital gain.

So it will be either a lower dividends than current and expect the $18 to $20 to continue or decline. Or a less low dividend (maybe lower by just a bit) AND a capital gain.

Only time will tell.

#145 MF on 01.23.17 at 3:18 pm

#123 Ace Goodheart on 01.23.17 at 1:30 pm

Hey I was a fan of GWB. Another person who people will state who they hate in public, but in private support. Even though it was deeply critical of him, I even enjoyed Oliver Stone’s W.

MF

#146 MF on 01.23.17 at 3:25 pm

#117 Euro observer on 01.23.17 at 12:34 pm

That’s okay. I don’t want to say it will be deeply satisfying, but we will probably be watching the EU collapse from afar at some point.

#137 };-) aka Devil’s Advocate on 01.23.17 at 2:52 pm
It’s been three days, dude. — Garth

Obama would have been finishing his 3rd golf game by now.

MF

#147 Euro observer on 01.23.17 at 3:27 pm

It’s been three days, dude. — Garth
———–
The guy is moving fast.
Another blow to us:

https://ca.finance.yahoo.com/news/trump-signs-order-withdrawing-u-165735094.html

Trump signs order withdrawing U.S. from Trans-Pacific trade deal

This was supposed to bring jobs and wealth to Canada.
http://international.gc.ca/economist-economiste/analysis-analyse/tpp_ei-re_ptp.aspx?lang=eng

1. Introduction
The Trans-Pacific Partnership Agreement (TPP) is the most significant regional trade agreement that Canada has negotiated since the North American Free Trade Agreement (NAFTA) concluded nearly two decades ago. The twelve countries in the TPP form one of the largest trade areas in the world, accounting for nearly 40 percent of global Gross Domestic Products (GDP). For Canada, the TPP countries as a group would be Canada’s largest trading partner, with more than 70 percent of Canada’s trade and investment flowing through the TPP region.
——————–
Next is NAFTA.

#148 Euro observer on 01.23.17 at 3:34 pm

#145 MF on 01.23.17 at 3:25 pm
#117 Euro observer on 01.23.17 at 12:34 pm

That’s okay. I don’t want to say it will be deeply satisfying, but we will probably be watching the EU collapse from afar at some point.
———————–
Eu collapse will not bring European economy collapse to the degree that NAFTA cancellation will bring to North America.

BTW I will welcome EU collapse as it will end the crises with the refugees who can can then find safer place (invited by the pretty boy) in Canada.

It imminently will drive house prices higher as then roofs and garages can be rented as well /sarcasm off.

Cheers.

#149 For those about to flop... on 01.23.17 at 3:36 pm

#142 MF on 01.23.17 at 3:25 pm
#117 Euro observer on 01.23.17 at 12:34 pm

That’s okay. I don’t want to say it will be deeply satisfying, but we will probably be watching the EU collapse from afar at some point.

#137 };-) aka Devil’s Advocate on 01.23.17 at 2:52 pm
It’s been three days, dude. — Garth

Obama would have been finishing his 3rd golf game by now.

MF

///////////////////////////////

What’s the chances Obama goes for a round of golf at one of the Orange Octopuses courses soon, and “accidentally ” hits a ball through the biggest window he can find…

M42BC

#150 MiniDonuts on 01.23.17 at 3:37 pm

The real-estate market continues to surprise us all. Who would have thought we’d have THAT much price appreciation in Toronto.

I still hear people convinced that renting is “throwing money” away. Whether it’s true or not doesn’t matter, what matters is that enough people believed it, and Toronto housing as an asset is still in a bull market.

Will Toronto housing prices chart turn into a $VRX? Probably not. A $DH.TO? Still seems improbable. A Magna ($MG.TO) perhaps?

Let’s just hope Vancouver is not in “consolidation” phase before the next “leg up”.

#151 jess on 01.23.17 at 4:06 pm

The roof of your house caves in. It’s a huge job to fix it – and you get some builders in. They charge a fortune – but, well, what price a roof over your head?

Then six months later, your roof caves in again! Time to sue the builder. Only there’s a problem. The building company has gone bankrupt. So you chase down the company owners – but find that the company’s registered in a tax haven. You go through the courts, and you’re delighted that your country has an agreement to share information with the tax haven! After a lot of work, you find out the names of the company’s directors, along with photocopies of their passports and even their shoe sizes.

Only now there’s another problem. And it’s a biggy.

The company ‘directors’ are in fact ‘nominees’: directors who have merely rented their name to the company. Each of them, it turns out, are directors of thousands of companies. They are straw men hiding the real builders – those people who extracted those tens of thousands from you for ‘fixing’ your roof, and who doubtless extracted millions from many other unsuspecting punters – and who remain a mystery. The tax haven has ‘shared’ all the information it has with your country and the courts – but still you are no closer to tracking down the real, warm-blooded humans who set up the building company – humans who are quite likely to be swilling champagne now, driving their Ferraris through the streets of Monaco, and laughing heartily.

While you, in your dilapidated home, wonder how to pay for a new roof.

Countries have signed lots of agreements to share information with each other. Tax havens enthusiastically sign up to these agreements. “We will give you all the information we have, whenever you ask for it,” they say. And they mean it – only it’s a trick. They simply make sure they don’t have the information in the first place. They will tell you all about the nominee directors, the trustees, and the other sham officials who make the secrecy world function – knowing that you are no closer to finding the real warm-blooded humans behind the mischief.
Enter Disclosure of true beneficial ownership of companies

http://www.tackletaxhavens.com/the-solutions/true-beneficial-ownership/

#152 Euro observer on 01.23.17 at 4:13 pm

#149 MiniDonuts on 01.23.17 at 3:37 pm
The real-estate market continues to surprise us all. Who would have thought we’d have THAT much price appreciation in Toronto.

I still hear people convinced that renting is “throwing money” away. Whether it’s true or not doesn’t matter, what matters is that enough people believed it, and Toronto housing as an asset is still in a bull market.

Will Toronto housing prices chart turn into a $VRX? Probably not. A $DH.TO? Still seems improbable. A Magna ($MG.TO) perhaps?

Let’s just hope Vancouver is not in “consolidation” phase before the next “leg up”.

————————-

It is not housing appreciations. It is the currency going down the drain, look at food prices.

The people just don’t get it yet. Wen their brains unfreeze in the spring, watch out.

#153 Trump a great man on 01.23.17 at 4:44 pm

aka Devil’s Advocate on 01.23.17 at 2:52 pm
#130 Brian on 01.23.17 at 2:45 pm

While many have fastened their seatbelts and put their head between their knees in anticipation of a major Trump fail he hasn’t crashed yet and may just surprise us. If he does so it will likely pave the way for an O’Leary win

Your kidding right? Kevin O’Leary is the opposite of Trump. O’Leary is all about Free trade and shipping jobs to China. O’Leary is ALL about the RICH and MONEY. No one but high school drop outs like realtors are foolish to vote for that clown

#154 Trump a great man on 01.23.17 at 4:47 pm

Brian on 01.23.17 at 2:45 pm
Because of Trump, O’Leary will never make it in Canada. Once people see how Trump causes so many problems going forward Canadians will realise O’Leary is just as crazy. I’m not sure the conservative party would make him leader as it would cost them all forty seats in Quebec.

Are you CONservaives delusional? O’Leary LOVES shipping jobs OUT of Canada and very pro free trade. O’Leary is the exact opposite of Trump in the worst way possible. O’Leary is a bigger clown then Harper and Canadians Hate clowns. Sorry you CONs are going to go lose

#155 Renter's Revenge! on 01.23.17 at 5:02 pm

#107 IHCTD9 on 01.23.17 at 10:36 am

It would take a special kind of stupid borrow 1.9 Mil for something half the width of my laundry room. An entire 6 figure income swallowed for decades on end.

==================================

“special kind of stupid” I love it!

Even without a drop in prices, handing over decades of 6 figure income for a house still makes no sense.

#156 MouldyinYVR on 01.23.17 at 5:46 pm

The only ‘lights out in YVR’ are the lights of rental apartments being switched off as tenants leave. So many are being forced out of moderately priced rental units by owners who have decided to sell or have ‘renovicted’.
Try and find a decent 500 square foot rental for less than $1,600 in Vancouver – good luck to you!

#157 crowdedelevatorfartz on 01.23.17 at 7:09 pm

@#96,97 and 111 Stock Pricker

I see you started drinking early today….
Well done!

#158 Ace Goodheart on 01.23.17 at 9:09 pm

Found it!

https://www.realtor.ca/Residential/Single-Family/17723631/44-BELMONT-Street-Toronto-Ontario-M5R1P8-Annex

In Yorkville, of course. Yes they go for a million or two around there…..

#159 Ace Goodheart on 01.23.17 at 9:15 pm

If you want a slightly wider house in a much less desirable neighbourhood, you can get this for the downpayment on the twelve foot wide Yorkville row house:

https://www.realtor.ca/Residential/Single-Family/17715276/70-SANDCLIFF-Road-Toronto-Ontario-M6N2M3-Rockcliffe-Smythe

Of course there are no affordable houses in Toronto…..

#160 soost on 01.24.17 at 8:46 am

Don’t forget the worst lamb of them all. Brad Lamb